Correlation Between HB Technology and Iljin Display
Can any of the company-specific risk be diversified away by investing in both HB Technology and Iljin Display at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining HB Technology and Iljin Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HB Technology TD and Iljin Display, you can compare the effects of market volatilities on HB Technology and Iljin Display and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in HB Technology with a short position of Iljin Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of HB Technology and Iljin Display.
Diversification Opportunities for HB Technology and Iljin Display
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 078150 and Iljin is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding HB Technology TD and Iljin Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iljin Display and HB Technology is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on HB Technology TD are associated (or correlated) with Iljin Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iljin Display has no effect on the direction of HB Technology i.e., HB Technology and Iljin Display go up and down completely randomly.
Pair Corralation between HB Technology and Iljin Display
Assuming the 90 days trading horizon HB Technology TD is expected to under-perform the Iljin Display. In addition to that, HB Technology is 3.08 times more volatile than Iljin Display. It trades about -0.24 of its total potential returns per unit of risk. Iljin Display is currently generating about -0.2 per unit of volatility. If you would invest 90,000 in Iljin Display on September 3, 2024 and sell it today you would lose (4,100) from holding Iljin Display or give up 4.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HB Technology TD vs. Iljin Display
Performance |
| Timeline |
| HB Technology TD |
| Iljin Display |
HB Technology and Iljin Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HB Technology and Iljin Display
The main advantage of trading using opposite HB Technology and Iljin Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HB Technology position performs unexpectedly, Iljin Display can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Iljin Display will offset losses from the drop in Iljin Display's long position.| HB Technology vs. Dongsin Engineering Construction | HB Technology vs. Doosan Fuel Cell | HB Technology vs. Daishin Balance 1 | HB Technology vs. Total Soft Bank |
| Iljin Display vs. Hankook Steel Co | Iljin Display vs. Genie Music | Iljin Display vs. Korea Shipbuilding Offshore | Iljin Display vs. Hanil Iron Steel |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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